Case Analysis

Malaluan, Joselito S. BSAM-3203 Mgt 108 (Business Policy and Strategy) Blood Bananas Case Analysis

I.

Central Problem The problem which the Chiquita Brands International Inc. facing off is that the latter was forced to decide whether to pay the AUC for protection or risk the lives of every employees of the said company in Colombia due to the increasing crime rate by 1990s. Colombia had become a very violent country. Kidnappings and murders of wealthy Colombians and foreigners had become common place. Due to this instance, it has been a threat as well as a problem not only to the employees but also to the operation of the Chiquita’s Banadex as well as the implications whether to accept the

offer of the paramilitary organization known as AUC.

II.

Areas of Consideration Chiquita Brands must consider the safeness of its employees since they are a vital part of the organizations success. They shall be ensured with security that should be given by the latter. Since they are the largest banana producers in the world and a major supplier of bananas in Europe and North America, they must consider their vital role in the industry of commerce if they will just move their branch in C olombia. Another area that should be consider is the service that being offered by the AUC, they must evaluate carefully and critically analyze what will be the effect of this not only to the employees but also to t he reputation of the Chiquita Brands. The issues about crimes in Colombia shall not be easily ignore by the latter since it will be a big threat to their operation especially to the lives of every individual who are employed in the Chiquita brands. Engaging in the local governments operation and securing the needs for safeties of the individual as well as implementing well-planned and alternative strategies and decisions before taking actions shall be consider by them.

III.

Alternative Forces of Action

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Agree to pay: if Chiquita agreed to pay for “protection” they might forestall killings and kidnappings; however they would be financing a group of terrorists. The money it paid would be used to further the activities of AUC.

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Refuse to pay: if Chiquita reject the offer of “protection” from Castano, then

there was the real likelihood that Banadex employees would be kidnapped and/or executed. There was ample evidenced of the brutality of AUC and similar organizations currently operating in Columbia. While a legitimate security company might be found to protect the plantations and employees would be inordinately inexpensive. Only the governments had the strength to mount such a protective service and neither the U.S. nor Colombian governments were willing to support such an effort. Furthermore, it was unlikely that the Colombian government would welcome a mercenary force hired by the Chiquita into the country. 

Exit the country: if the decision was made to abandon the plantations in Colombia what would happen to the 12000 individuals whose livelihoods depended upon the work or workers on the plantation? Contributing 70 million dollars annually to the economy, a rapid exit would represent a significant loss to the Colombian people. Further, Banadex exports represented a significant portion of the bananas sold by Chiquita brands. The loss of this supply would not only affect Chiquita Brands’ profitabi lity and shareholder value but also the

profitability of numerous Chiquita distributors around the world. IV.

Conclusion/Recommendation It would be better if the Chiquita Brands’ will choose not to pay the AUC although they

are not been designated as terrorist by the U.S government, still the Colombian organization as well as the government will not welcome those groups who is known in doing some brutal things. Aside from that, the cost of payment for the service that will be rendering by the AUC is far too much expensive that it could already support sufficient men from legal and authorized institutions that can withstand 8000-11000 paramilitary fighters. The U.S government as well as the Colombian will not let their co-residents without sufficient security that could handle the safeness of ever y individual. If the Chiquita Brand’s will communicate and cooperate with the government for the

fulfillment of their needs for security for company and employees, it would be 100% success and granted.